The National Scene - Wednesday, April 14, 2010 14:50 - 0 Comments

More On The Financial Crisis Facing Our Nation

The debate still is ongoing as to why and how our nation’s economy was almost destroyed during the Bush years. In fairness to President Bush, the problems began even before he took office in 2001. There were also some key legislative leaders involved who must share the blame with the Bush Administration on this issue. One of them is former Senator Phil Gramm, the architect of a number of measures that became law, that were special-interest created and driven. Senator Gramm would be near the top of any list of suspects when you attempt to figure out what led to the economic meltdown.

Most economists agree that the economic crisis facing this country wouldn’t have happened but for the Gramm-Leach-Bliley Act. The banking deregulation bill eliminated the structural restraints that had prohibited commercial banks from the speculation that brought the United States perilously close to a major depression last year. Interestingly, it was the same Senator Gramm who was a co-sponsor of the Commodity Futures Modernization Act of 2000. That legislation exempted over-the-counter derivatives from regulation. The unregulated trading of derivatives – especially credit default swaps – directly resulted in the $181 billion bailout of AIG (the insurance giant that was too big to fail) and the collapse of Lehman Brothers (the investment bank which most felt couldn’t sink). But Senator Gramm didn’t stop there.
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